The Houston Firefighters’ Relief and Retirement Fund (HFRRF) has followed the lead of two Virginia pension funds that bought crypto assets two years ago. Just as firefighters themselves are focused on the safety of the populace and risk mitigation, so are those responsible for their pension fund concerned with mitigating financial risk and growing the asset. Now with $5.5bn banked, the HFRRF recently invested $25m in Bitcoin and Ether through NYDIG, a Bitcoin-focused subsidiary of asset manager Stone Ridge.
The two Virginia pension funds that led the pension charge to crypto are opting to increase investment by an additional $50 million.
The HFRRF membership is made up of 6,600 active and retired firefighters and their families. Active firefighters have contributed 9% of their salary to the fund since 2004, with the City of Houston required to contribute at least double that amount by state statute.
“I see this as another tool to manage my risk,” Ajit Singh, the chief investment officer for the fund, told Aljazeera. “It has a positive expected return and it manages my risk. It has a low correlation to every other asset class.”
The recent rallying of Bitcoin has investors taking a closer look, and those include professionals who manage state and local government pension funds, which equal greater than $5.5 trillion in assets, per Aljazeera reporting, citing the National Association of State Retirement Administrators.
“This week’s rally, which pushed Bitcoin above $66,000, was spurred by optimism that the launch of the first futures exchange-traded fund for the currency in the U.S. would lead to more mainstream acceptance,” per the article.
Singh said they opted out of the futures/synthetic realm and for actual tokens, believing that “having physical assets — actual tokens — gives us in the future the possibility of income generation potential,” thanks to supply and demand.
After significant time invested in watching and studying crypto as an asset class to potentially add to the investment portfolio, Singh said the decision became obvious: “It became an asset class we could not ignore anymore.”